Finance: The Chinese riddle

With fewer than 100 days to go to the official resumption of Chinese sovereignty over Hong Kong, opinion remains sharply divided over whether the colony is a place to head for or one to leave in a hurry. A study by Hong Kong University, carried out two years ago, came to the conclusion that 13 per cent of the population would leave before the July hand-over, while a survey by Credit Lyonnais found that 23 per cent of those questioned were guarding against future uncertainties by holding more than half their savings in foreign currencies.

The exodus hit a peak in 1992, with 66,200 leaving, and recent surveys suggest a slowing of the outflow. Last year's 40,300 departures represented a low for the present decade.

Norman Lyle - soon to be president of the Chartered Institute of Management Accountants - showed this week that some high-profile accountants are prepared to make the move, by taking up the position of group financial director for one of the colony's old names, Jardine Matheson.

But others are a little more circumspect. James Wheeler, managing director of the financial and information technology recruitment specialists Hewitson Walker, says that at the moment he would stay away from Hong Kong, opting instead for such destinations as Singapore and Malaysia.

It is a view echoed by the US-owned Robert Half International. While it is looking to increase its global presence, the company is reckoned to be making further expansion in the UK and continental Europe a higher priority, while any investment in the Pacific Rim is likely to target Singapore and Malaysia ahead of the British colony.

On the other hand, Robert Walters Associates is pressing ahead on the grounds - in the words of Richard Parnell, the director responsible for Hong Kong - that the colony's market has "all the conditions to run a good business". Earlier this month it opened an office of four consultants and two support staff, having about a year ago identified the skills shortage, strong economic growth and amount of flux, or market liquidity, that generally combine to create a climate in which it can thrive. The last factor is especially important. As Mr Parnell points out, in Hong Kong "it's not unusual for a young accountant to move after 12 to 18 months, whereas here [Britain] they are more stable".

Nor is he unduly concerned about political stability. "The Hong Kong hand-over has been coming for so many years. De facto, it has occurred already. Last year, people started communicating with mainland China and getting approval for their business decisions," he says, adding that everybody has their eyes stuck on the prospect of serving a proportion of China's more than 1 billion citizens. The result is "something of a feeding frenzy" for young accountants. Those with the right qualifications can find themselves having five to six interviews in the same day, and being offered jobs quickly.

But the reluctance of others is based on the idea that the hand-over itself could precipitate an exodus, following the reality of a change of ownership. Mr Wheeler of Hewitson Walker points out that Hong Kong has traditionally been a "plum posting for expats", on the grounds that it offers a higher standard of living from that generally on offer in Europe, plus the opportunity to make or build a career.

Mr Parnell thinks this will continue to attract appropriately qualified people, particularly returning Hong Kong nationals. But, with political uncertainty in prospect, talented individuals could be looking to return to Britain, or go elsewhere in the Far East, says Mr Wheeler, who adds that the situation is, however, too complex to predict with any certainty.

Moreover, the tight UK market that Mr Parnell says is forcing banks and other multinationals with Hong Kong operations to hire locally rather than transfer people from London could be eased by an influx of talented individuals, says Mr Wheeler. Consequently, with plenty of business likely in the foreseeable future in a market that he knows, he is reluctant to test one that he knows little about.

Alternatively, for those still drawn to the expatriate lifestyle of the Far East, there are still plentiful opportunities in Singapore, while such "tiger economies" as Malaysia and Indonesia are adding to the drain on skilled people.

Robert Walters's Hong Kong office is meant to be a regional centre, with the aim of putting recruits into the increasingly needy territories of mainland China, the Philippines, Vietnam, Taiwan and Korea, as well as the colony. Furthermore, points out Mr Parnell, Hong Kong is a regional centre for many multinationals, with the result that a large number of hiring decisions will be made there.

Even Australia - previously a big supplier of temporary accountants to the UK - is experiencing shortages of the right sort of people. And this situation does not apply only in the Far East itself. Organisations are also finding it difficult to find people in the UK or the US who are equipped to manage those actually working in the region, adds Mr Parnell.